Now Daily Investigation
Just two weeks before the 2013 presidential elections, Zimbabwean dictator Robert Mugabe ordered all the country’s diamond mines operating in the rich Marange fields to be merged.
Although he was tipped to win the election due to unfavourable conditions for the opposition, Mugabe’s directive appeared aimed at securing the mines for himself and his partners in the event that he lost the election.
The merger was done with the haste that accompanies all the despot’s orders concerning money matters. Those involved are all too aware that failure to comply with Mugabe’s wishes, legal or illegal, can mean certain death at the hands of his ruthless mafia disguised as intelligence and security officials. Besides, Edward Chindori-Chininga, the parliamentary investigator who had just uncovered breathtaking official corruption in the diamond fields had just been murdered – allegedly on the president’s orders – and the information had conveniently been leaked to send terror into others of like minds.
But, as in the last days of Mobutu Sese Seko, the murderous Zairean dictator who looted his diamond-rich country dry, Mugabe no longer has honest messengers. The people he sends to steal state resources on his behalf are seasoned thieves who prefer to fill their pockets before they start loading his vessels. So, unlike in the early days of the regime, these days, whatever Mugabe’s goon squad led by his thuggish wife Grace Mugabe touches immediately turns to dust, leaving a trail of destruction of the state enterprises they would have looted. Previously, the ravaged parastatals could survive, in one form or another. Today, they just collapse and Mugabe orders taxpayers to foot the bills and bear the cost of his corruption and misrule.
In December 2013, the entire board of Marange Resources, the state diamond firm was dissolved by the new mines minister Walter Chidhakwa, Mugabe’s close relative who had just been appointed to replace the bribe-taking, openly corrupt Obert Mpofu. Typically, no explanation was given for sacking the board and the country’s docile taxpayers never bothered to ask why this expensive move was being taken just six months after Mugabe rigged another election to retain power.
A few weeks later, Chidhakwa suspended the entire top management of Marange Resources, claiming this was to facilitate ‘investigations’. But, investigations into what, nobody was saying. A government committee was set up and went around the country probing the private business dealings of the suspended executives, in what one insider told Now Daily was a ‘bribe-collection exercise’ from the suspects than an actual official enquiry. After a while, the so-called probe committee appeared to have run out of steam. Chidhakwa lied to parliament that the committee’s report was ready and he would bring it to legislators by February 2015. Chidhakwa’s report has never been seen.
However, official documents seen by Now Daily prove beyond doubt that Mugabe created the confusion in Marange in order to facilitate massive theft of the gemstones. The suspended and sacked executives stole something, yes, but not the entire multi-billion dollar inventory as is being alleged by Mugabe and his Zanu PF party officials.
Obert Dube, the former chief executive of Marange Resources built a hilltop villa in Gweru and a nightclub curiously named the Red Parrot; former finance director Nathaniel Shoko was found to have invested in the three-star Pote Hill Hotel which was, ironically, opened officially by Mugabe himself; former marketing executive Piri Mukono built a private school while other top company officials blew their takings on luxuries and holidays abroad. However, these small thefts pale into insignificance when compared to what Mugabe and other senior Zanu PF chefs took from the diamond fields at that time, it emerged. In fact, the suspensions and harassment of the Marange Resources top guns appear to be aimed more at silencing them about what they know about who stole what among the government brass than revealing the truth.
FAKE JOINT VENTURE
On July 14 2013, just two weeks before the presidential elections, Marange Resources started a ‘joint mining arrangement’ with Mbada Diamonds, a joint venture between the Zimbabwe government and the Chinese Red Army. What happened between July 14 and August 3 2013 is a diamond heist of gargantuan proportions, the real reason for the collapse of Marange Resources, which has left in its wake debts, liabilities and litigation costs running into hundreds of millions of dollars.
According to Marange Resources officials who spoke to Now Daily, the order to merge with Mbada came straight from Mugabe’s office and they were not allowed to question it.
Mbada Diamonds was represented by its chairman Robert Mhlanga, president Robert Mugabe’s trusted former Air Force helicopter pilot. However, it was common knowledge among those involved that the Chinese Red Army was in charge and the proceeds from these shady deals would end up being split with Grace Mugabe, with her share being deposited in Hong Kong and other south east Asian bank accounts, sources say.
“There was no documented agreement that outlined the terms and conditions of the mining arrangement,” says state auditor-general Mildred Chiri. “On reviewing the transactions that occurred during this period, I noted that there were no records of production inputs brought in by Mbada and the hours worked and the consumables utilized could not be ascertained. Log sheets were not signed by both parties as evidence of agreeing on the hours worked, machine hiring rates and the agreed basis for charging work done.”
This was a highly charged election period. Like all election seasons in Zimbabwe, massive thefts of state resources are executed by Mugabe and Zanu PF to fund their campaigns. Junior officers of parastatals who questioned this pilfering risked being lynched by party mobs, we were told.
“Once, when a security guard asked one of the state security officials from Mugabe’s office for some identification, the man just pulled out a gun and pointed it in his face. The man told the guard that the gun was his ID and the guard just allowed him to pass. That’s the sort of environment we were working in,” said a former Marange Resources employee.
So, the great Marange heist was executed in broad daylight, with the active participation of company officials, some of who are only revealing what happened because they are now scapegoats and fear for their lives.
“No documentation was raised and acknowledged by both parties upon transferring of rough diamonds to Mbada. The company maintained individual records of rough diamonds and upon reconciliation of the records at year-end, the schedule provided by Mbada differed from Marange Resources’ records by 4 731 carats valued at US$ 191 655 in the negative,” Chiri said.
Typically, the amount of stolen diamond money was written off by Marange Resources as an “inventory adjustment” in their financial statements. Chiri said there had been “fraud and error and the possibility of unrecorded liabilities”.
“There is also a risk of misappropriation of rough diamonds as there were no adequate controls during this period,” said Chiri.
The auditor-general expressed frustration during her investigation over the lack of a written contract to actualize the arrangement between Marange Resources and Mbada Diamonds. She also found it amazing that diamonds could just be moved from Marange to Mbada without reconciling records.
However, those familiar with Mugabe’s modus operandi know that directives are just given without any paperwork. For the officials involved, it is enough to tell ground level staff that the illegal or questionable orders are coming from ‘the president’s office’. Marange management acknowledged that they had no input in this so-called joint venture with Mbada. There were no feasibility studies, no contracts and no records. It was just a matter of shuffling the diamonds into the hands of corrupt government officials, who transferred them to the Chinese Red Army officers, who had Fokker planes waiting nearby to transport them to Beijing. After that, the Mugabes would get their cut by electronic transfer to bank accounts of their choice in Asia. Previously, the money would have been sent to Europe but the 92 year-old despot is now banned from doing business there because of his documented corruption, political murders and misrule.
“The arrangement with Mbada was beyond management control and, as such, there was no room for agreeing the terms of engagement and administrative arrangements thereof prior to the temporary partnership,” Marange Resources interim management said in a statement. “There was no document to authorize and guide the implementation of the collaboration. The reasons for diamond stocks discrepancy was difficult to ascertain as Marange Resources could not access the sorting records for stocks shipped to Mbada Diamonds.”
The value of diamonds stolen by Mugabe and his officials from Marange through shady deals like this one will never be known. Amid this blame game, time is moving, records are disappearing, culprits are escaping and witnesses are being displaced. Impoverished Zimbabweans are too busy trying to make a living to worry about Mugabe’s thievery. Members of parliament, who are supposed to question these issues, are too partisan, too fearful or too busy feathering their own nests to demand answers and an end to this corruption. Others are just too ignorant to understand the consequences until it begins to affect their hefty allowances.
Marange Resources is now deep in the red. The company’s financial records show that it owed Mbada Diamonds $78 022 at the end of 2013, the last year for which financial records are available. In that year, the company made a loss of $30 million, which is further evidence that the joint mining arrangement with Mbada was not viable. The company’s current liabilities exceed current assets by $74 million. These are losses that will have to be borne by the country’s overburdened taxpayers. That will not stop the Mugabes from taking another fabulous holiday in the Far East.
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